If you’re using Hootsuite as your twitter management tool, you may have been wondering about the yellow “promoted by” button showing on some tweets. This is the lovechild of Twitter and Hootsuite in an attempt to grow both companies’ revenue family. Currently, the only way to disable the yellow buttons is to have a Hootsuite pro account at $5.99/month and check off the button that says “show promoted tweets.”
First, let’s agree that every company should be able to make money off of its products. Let’s also agree that creating actionable and profitable business models are probably among the most challenging endeavors companies (any company) have to take on at some point in their lifetime.
In an ideal world, the more valuable the product or solution, the more money a business should be able to make. Web2.0 however has been a rather imperfect world, and some of the most useful applications have actually been free (case in point: Twitter over the last couple of years).
Being the leader in the micro-conversation world with no real competition in the market, Twitter can afford to test various ad solutions. If people are truly unhappy with it, Twitter could easily change their approach with little impact. Hootsuite may enjoy the thought of riding on the Twitter tale, but in fact, the damage can be much greater to the Hootsuite brand (a number of equal alternatives, minimal switching cost, etc.)
What’s so bad about promoted tweets?
The concepts of people promoting brands, growing brand awareness, and creating word-of-mouth are well established. Peer recommendations are much more influential on Awareness, Preference, and Choice metrics. In 2009 Nielsen reported that 90% of consumers “completely” or “somewhat” trusted peer recommendations compared to 70% trusting brand websites. Search Engine results ads are only trusted by 41% and online banner ads were trusted by 37% of people. For some of us it’s Apple products, for others it’s Virgin America, yet for others it’s the president (yes, Obama is a brand too). We listen to the people we already trust and discover new products and companies through them.
Some brands don’t need to recruit advocates—they come naturally because of great products (Apple) or experiences (Cirque De Soleil, Disney). Other brands, pay through discounts, coupons, and special promotions that result in brand awareness and purchases.
Unfortunately for Hoostuite, Promoted Tweets has provides very little value to users. Most people will probably look to filter out the useless promoted tweets. The only ways to eliminate them are to a) pay $5.99/month, b) pretend the tweets aren’t really there, c) not use key word streams.
But wait. We said it’s okay for a business to make money?
That’s right! And Hootsuite couldn’t be in a better position to do just that. Hootsuite today is in an advantageous position: it has a large user base, preference from Twitter users, and an ability to deliver great user experience. With Tweetie’s latest integration challenges, it has been picking up speed on mobile devices as well. It has options. Here are a few to boot:
- Charge for value: Provide features that people actually want and need and charge for those. Currently, the Pro version doesn’t offer that much added value to convince people to increase their commitment to Hootsuite.
- Charge for extensions: Charge for the mobile and iPad applications as productivity tool on the go. Users will easily pay $0.99 to be able to use Hootsuite on their phones especially with Tweetie’s hiccups.
- Give and receive: Offer Opt-In option to people who agree to see the ads in return for a free feature.
- Charge more smartly: Create a Hootsuite for Business and charge for it. This means that Hootsuite will need to reframe its Pro offering -- currently a blend of features wanted by individuals, those more likely to be used by business, and some useless features like influencer score, easily achieved through Klout, and already integrated into the Free version.
One thing is certain: Hootsuite shouldn’t be putting itself at the mercy of Twitter and using its own audience base as lab rats.
Hootsuite has done a great job with feature enhancements, usability, and overall value. The company gets what it takes to make good products people want to use. However, the recent integration of Promoted Tweets shows a significant gap in Hootsuite’s ability to complement its product side with a solid business strategy and execution.
Let’s hope Hootsuite’s leadership team, with the helm of Ryan Holmes, sees that too and comes up with original, creative, and sustainable business models that benefit users and grow revenue for the company.